Brigade Hotel Ventures IPO Details: Launch Date, Share Price, Size & Review

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Business Profile of the Brigade Hotel Ventures Limited

Brigade Hotel Ventures is a leading owner and developer of hotels in key cities in India, primarily in South India. The company is a subsidiary of Brigade Enterprises, a leading Indian real estate developer. As the second largest chain-affiliated hotel owner in South India, they have a portfolio of nine operating hotels across Bengaluru, Chennai, Kochi, Mysuru, and GIFT City. They operate by global hospitality companies like Marriott, Accor, and InterContinental Hotels Group. The company is strategically locations its hotels in high-population areas, premium neighborhoods, and commercial centers, catering to customer preferences and expectations.

With an average occupancy of 73.29% in FY24, the company plans to develop five additional hotels operated by global hospitality companies. The company follows a business model where it owns or leases hotel assets and engages global hospitality companies for operation. These include a luxury beach resort in Chennai, two upper midscale hotels in Bengaluru, a luxury hotel under the InterContinental brand in Hyderabad, and a wellness resort in Vaikom, Kerala.

Brigade Hotel Ventures Limited IPO Objective

As per the draft red hearing prospects, the IPO issue consists only of fresh issue.

  • Brigade Hotel Ventures IPO offer only has fresh issue of Rs. 9, 000 million. As per DRHP document, the company aims to utilize IPO proceedings towards payment of certain loan obligation of company and its subsidiary; for buying land from its promoter; for acquisitions and general purposes.

Issue Price & Size: Brigade Hotel Ventures Limited IPO

The issue price of Brigade Hotel Ventures Limited hasn’t been released yet. Upon releasing the dates, the investors can bid between those price ranges. The company only has a fresh issue of Rs. 900 crores.

Launch Date of Brigade Hotel Ventures Limited IPO

The IPO opening date of Brigade Hotel Ventures hasn’t been officially announced yet, upon the declaration of dates investor can bid for IPO.

Brigade Hotel Ventures Limited Promoters & Shareholding

As of date, there is only one promoters of the company i.e. BEL (Brigade Enterprises Limited).

The promoter along with promoter group in aggregate collectively holds 100% of the paid-up share capital of company.

Should You Subscribe to Brigade Hotel Ventures Limited IPO or Not

While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.

Competitive Strengths of Brigade Hotel Ventures Limited:

Strategically Located

Brigade hotels venture business model involves owning or leasing hotel assets and engaging global hospitality companies for operation. As of June 30, they own at least 500 rooms in South India. They have a portfolio of nine operating hotels across Bengaluru, Chennai, Kochi, Mysuru, and GIFT City, with 1,604 keys.

The company’s hotels are strategically located near key business hubs, technology parks, and leisure options, making them suitable for both corporate and leisure travelers. These hotels are operated by global hospitality companies like Marriott, Accor, and InterContinental Hotels Group. The company selects best hotel brands to offer best services to their visitors. Along with strategically placement of their assets, the number of rooms in the hotels is higher than the average in India within the same segments. The company’s average occupancy in Fiscal 2024 was 73.29%, higher than the industry average of 64%.

The company plans to develop five additional hotels, including a luxury beach resort in Chennai and two upper midscale hotels in Bengaluru. The luxury beach resort will be developed under the Grand Hyatt brand, while the upper midscale hotels will be developed under the Fairfield by Marriott brand. The company also plans to develop a luxury hotel under the InterContinental brand in Hyderabad. The company benefits from the experience of its senior management team, guided by directors with extensive experience in the hospitality and real-estate industry.

Focus on Asset Management

The company operates hotel assets through management contracts, attracting a global clientele and efficiently managing operations. They engage with global hospitality companies to optimize performance and access industry best practices. They closely monitor and oversee hotel performance, focusing on space utilization, energy consumption, shared services, facility upgrades, staffing optimization, and technology.

The company focuses on enhancing staff productivity and efficiency through training and learning exercises to optimize the staff per room ratio. As of June 30, 2024, their ratio was 0.74. Current trends suggest luxury business hotels have a ratio below 2.0 and three and four-star hotels between 0.8 to 1.2.

They have implemented initiatives to reduce energy consumption and focuses on shared services, upgrading facilities, and optimizing staffing. They leverage technology such as biometric authentication, cloud property management systems, and digital menus to enhance operations and customer experiences.

Focus on ESG Factors

They aim to create a win-win situation where providing memorable guest experience doesn’t compromise on sustainability efforts. They use advanced fixtures to reduce water usage and optimize energy usage by integrating energy-efficient technologies. They also prioritize safety and well-being through comprehensive occupational health and safety practices, ensuring staff are well-versed in safety protocols. They provide generic OHS training and targeted training sessions, such as the ‘Introduction to Ergonomics’ program.

Strong Parentage

Brigade Enterprises, BEL, a leading real estate developer in India. BEL has completed 33 projects from Jan 2021 to June 2024, with an aggregate developable area of 17.49 million square feet. BEL’s extensive experience in real estate and commercial projects allows them to locate strategic land parcels for their hotels, combining hospitality with other amenities and services.

Well Positioned to Leverage Industry Tailwinds

The Horwath HTL Report predicts that India’s travel and tourism sector will contribute significantly to the country’s economy, with the World Travel & Tourism Council estimating its contribution at ₹ 15.7 trillion in 2022, ₹ 16.5 trillion for 2023, and ₹ 37 trillion by 2034. The Hotel Association of India (HAI) predicts foreign tourist arrivals (FTA) to cross 30 million by 2037, and 5 billion domestic visits by 2030. The demand for chain-affiliated hotels has also increased, with FTA recovering post-Covid to 9.2 million in 2023. The services sector, which is among the fastest-growing in the Indian economy, is also expected to benefit from the growth. Domestic travel visits have grown at a CAGR of 13.5% between 2001 and 2019, with the spend on tourism projected to rise by 170% from USD 150 billion spent in 2019 to USD 410 billion in 2030.

Future plans

  • Expand its operations and market presence by developing new hotels in select locations in India.
  • Capitalize on market demand and strengthen its position in the hospitality sector in India.
  • Improve operating efficiency and increase revenues by implementing various measures to reduce operating expenses.
  • Implement initiatives such as annual rate increases, weekend packages, long weekend gateway packages, food festivals, F&B up sell programs, and online booking platforms.
  • Explore opportunities for acquisitions, particularly in operating hotels.

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